Govt approves 7th pay panel recommendations

In a bonanza to 48 lakh central government employees, the Union Cabinet Wednesday approved recommendations of 7th Central Pay Commission with 34 modifications which will impose an additional annual burden of Rs 30,748 crore on the exchequer.

The increased allowances, which comes into effect from July 1, 2017, is based on the recommendations of the Committee on Allowances (CoA).

The allowances as recommended by the 7th Central Pay Commission would have cost the exchequer Rs 29,300 crore. The modified allowances approved by the Union Cabinet headed by Prime Minister Narendra Modi will increase the burden by Rs 1,448 crore to Rs 30,748 crore per annum.

Briefing the media after the Cabinet meeting, Finance Minister Arun Jaitley said the modifications are based on suggestions made by the CoA in its report submitted to the Finance Minister on April 27, and the Empowered Committee of Secretaries set up to screen the recommendations of the 7th Pay Commission.

The 7th Pay Commission suggested the abolition of 53 allowances. Of these, the government decided not to do away with 12 allowances, he said.

This will benefit over one lakh employees belonging to specific categories in railways, posts, defence and scientific departments.

The modifications approved Wednesday were finalised by the Empowered Committee of Secretaries based on the recommendations of the CoA, he said.

"The CoA had undertaken extensive stakeholder consultations before finalising its recommendations. It had interacted with Joint Consultative Machinery (staff side) and representatives from various staff associations.

"Most of the modifications are on account of continuing requirement of some of the existing arrangements, administrative exigencies and to further the rationalisation of the allowances structure," he said.

Sharing details, Jaitley said the Pay Commission had recommended a reduction in the HRA rates to 24 per cent for X, 16 per cent for Y and 8 per cent for Z category of cities.